Thompson-Quantum Airways 2015

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0U.S. Department of Transportation Federal Aviation Admin istration AUG 11 2015 Mr. Tony Thompson President, Quantum Airways 344 Hauser Boulevard Unit 5-305 Los Angeles, CA 90036 Office of the Chief Counsel 800 Independence Ave., S.W.

Washington, D.C. 20591

Re: Request for Legal Interpretation of 14 C.F.R. Part 119, Certification: Air Carriers and Commercial Operators

Dear Mr. Thompson:

This responds to your March 29, 2015 letter requesting an inte1pretation by the Federal Aviation Administration (FAA) of 14 C.F.R. pmt 119. Specifically, you ask whether§ 1l9.5(k), Cert{fications, authorizations, and prohibitions, would prohibit Quantum Airways, which plans in the future to become a part 135 certificated air carrier offering scheduled service, to advertise for purposes of raising pre-certification capital from equity investors and crowd funders. You indicate in your letter that § 119.S(k) could be interpreted to permit pre-certification advertising to investors in order to raise capital because the intent of the regulation is to prohibit the advertising of seats to potential passengers prior to the air can'icr or operator obtaining a certificate from the FAA under part 119. You state that in your view, advertising a potential capital retum on an investment would not be prohibited by § 1l9.5(k) because the subject of the advertising would constitute a "non-seat benefit," such as "admission to launch patties, possible meetings with celebrity sponsors, food and meal benefits, and other similar non-seat benefits." In response to your question, §119.5(k) would not apply to the pre-certification adve1tising of Quantum Airways as a potential investment opportunity. This is because by adve1tising the investment opp01tunity in a planned, not-yet-ce1tified, pait 135 ce1tificated carrier, you would not be advertising the sale of air transportation of persons or property for compensation or hire as a common carrier.

In accordance with § 119 .5(k), [n]o person may adve1tise or otherwise offer to perform an operation subject to this pa1t unJess that person is authorized by the Federal Aviation Administration to conduct that operation.

The rule states that no person may (1) advertise an operation or (2) offer to perform an operation subject to pait l 19. Among other things, part 119 prescribes the ce1tification requirements an

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operator must meet in order to obtain and hold a certificate authorizing operations under patt 121, 125, or 135, and operations specifications for each kind of operation to be conducted and each class and size of aircraft to be operated under part 121 or 135 of this chapter. § 119. 1 (b)(2). Part t 19 also prescribes the requirements an operator must meet to conduct operations under part 121, 125, or 135 and in operating each class and size of aircraft authorized in its operations specifications. § 119. l(b)(3). In addition, 14 CFR § 1.1, General definitions, defines "operate,', with respect to aircraft, to mean use, cause to use or authorize to use aircraft, for the purpose (except as provided in §91.13 of this chapter) of air navigation including the piloting of aircraft, with or without the right of legal control (as owner, lessee, or otherwise).

Thus, the context of "operations," "operated," and "operate" in part 119 is fligh t operations. These terms refer to the use of aircraft for the purpose of air navigation. Because your proposed advertising does not relate to "operations" within the meaning of part 119, it would not violate §119.S(k). 1 Finally, for you1· info1mation, under 14 C.F.R. part 201, Air Carrier Authority Under Subtitle VII of Title 49 ofthe United States Code, an applicant for new or amended certificate or commuter air canier authority "shaJI not ... [a]dve1tisc, list schedules, or accept reservations for the air transportation covered by its application until the application has been approved by the Department." 14 C.F.R. §201.S(a)(l). We also recommend that you disclose to investors that they are not prepurchasing air transportation with their investment.

This response was prepared by Jonathan Cross, a Senior Attorney in the Regulations Division, Office of the Chief Counsel, and coordinated with the Air Transportation Division of Flight Standards Service, and the U.S. Depa.itment of Transportation's Office of the General Counsel, Aviation Enforcement and Proceedings Division. If you need further assistance, please contact our office at (202) 267-8013.

Sincerely,

Lorelei Peter Deputy Assistant Chief Counsel for Regulations, AGC-200 1 Compare Jn the Matter ofIsland Helicopters International, Ltd., FAA Docket No. C P08SOOO13, DMS No. FAA-2008-0693 (July l, 20 I 0), in which the FAA, c iting §119.S(k), sought to recover an $1 1,000 civil penalty against Is land Helicopters, for offering on its website to perform helicopter chatter flights for hire when it did not hold authority from the FAA to conduct chatter operations for hire.